American Republicans and Japan's Ultra-Nationalists: Tangled Web of Corruption

I have always been a fan of Japan. I have been there four times, including on my honeymoon. I even had the pleasure of living for a year in Kyoto working at Kyoto University. It is, in many ways, a wonderful place and I do hope to go back when time and money permit. I even am teaching my son what little Japanese language I still remember.

But there are always strange undercurrents in Japan. Korean and Chinese friends of mine cannot understand why I ever would visit Japan. They have an anger towards Japan that Americans have a hard time understanding. The presence of the yakuza (Japanese mafia) in Japan is omnipresent, once you are aware of it, which seems strange for an otherwise so law abiding nation. When World War II comes up in conversation, many Japanese still think Japan was justified in its imperialism and that America should apologize for the nuclear bombings and for the occupation. It is a constant source of scandal that Japanese leaders frequently downplay and misrepresent Japanese imperialism in Asia. I was amazed at how unresolved WW II seems in Japan and in Asia.

I just finished a book called Yamato Dynasty, by Sterling and Peggy Seagrave, that clarifies these strange undercurrents and actually makes one wonder if, despite America's military victory, Japan actually won the war in the long term. A collaboration of Japanese ultra-nationalists, many of whom were actual war criminals, and America's right wing Republicans, led by Herbert Hoover and Douglas MacArthur, pretty much conspired to allow Japan to avoid the kind of defeat that Germany suffered where apologies, reparations and structural changes within the German society were required. Japan was let off the hook, allowing war criminals and war loot to dominate Japanese politics and economics from the end of the war to the present, in exchange for sweet business deals for American big business and banks.

In Yamato Dynasty the Seagraves outline a unique kind of society that developed from the earliest period of Japanese history wherein the Imperial throne was a powerless pawn while wealthy families, from the Soga and Fujiwara, through the Shogunates, to modern Japan run by ultra-nationalists, called all the shots and pretty much looted the country for their own benefit. Or perhaps this system is not so unique because I can find parallels in Chinese history, Roman history, Russian history, and, for that matter, in our current Bush-led America where the government became nothing but a thin veil for looting the American and Iraqi economy by companies like Exxon/Mobil,Halliburton, etc.

Japan's history is a sordid structure behind a beautiful and very deliberate facade. Yamato Dynasty traces this history from the so-called Meji Restoration (which the book shows to be little more than a change from one set of strongmen, the Tokugawa Shogunate, to a new set, the rival Choshu and Satsuma strongmen) through the period of Japanese imperialism, led by ultra-nationalists and corrupt underworld figures, to the present day. During the rise of Japanese imperialism, and even on the verge of Pearl Harbor, Japanese militarism was funded by American conservative businessmen, particularly the Morgan banking family. After the war, while victims of Japanese brutality got little or no compensation, Morgan bank and other American companies got their pre-war loans (which paid for Japanese aggression) back largely in full.

Morgan bank began their loans in collaboration with Herbert Hoover, when he was Secretary of Commerce. Hoover and Morgan bank saw Japan as free of corruption, yet this was a complete misunderstanding of Japanese society. In fact, the Japanese elite basically fooled them. It is put this way by a Dutch born expert on Japanese politics:

"Corruption in Japan," says Karel van Wolferen, "is legitimized by its systematic perpetuation. It is so highly organized and has become so much a part of the extra-lefal ways of the Japanese system that most citizens or foreign residents do not recognize it for what it is, but accept it as 'a part of the system.'"

Interestingly, much of the partnership between American conservatives and business interests and imperialist Japan's oligarchs and business interests occurred during a time when Japan was already preparing for war with the West, America and Britain included. Notes from aides to Hirohito reveal as early as 1931 a belief that their aggression would lead to war with the West and Japan was preparing for this future war...with funding from the Morgan bank and unwitting help from American conservatives. What is perhaps even more shocking, is that even as late as 1937, as Nazi Germany and Imperialist Japan were in full swing, Herbert Hoover and conservaitve Republicans, planning a MacArthur/Lindbergh ticket for President, favored an alliance with Nazi Germany and Imperialist Japan. Another member of this conservative, pro-fascist coalition, was British Conservative politician Neville Chamberlain. Meanwhile FDR was in favor of economic sanctions against the fascist regime of Japan after it started its China War, but he was blocked by the Morgan bank, the pro-Japan Wall Street lobby, and their allies in Congress. Remember, this was on the eve of the Rape of Nanking in December 1937. This world would be a lot different if the pro-fascist Republicans, in alliance with Neville Chamberlain, had brought Britain and America into the Japan/Germany Axis. Thankfully, the FDR Democrats prevailed and we joined more reasonable Brits in opposing Nazi Germany and Imperial Japan.

Networks of kinship, bribes and backroom deals linked (and still link) Japan's politicians, imperial family, bureaucracy, business elite, and yakuza. This sordid system continued after World War II with little genuine reform, merely some careful repainting of the facade. While Democrats in Truman's government sought genuine change in Japan after the war, Herbert Hoover, Douglas MacArthur, and other Republicans sought to shield war criminals, hide war loot and allow Japan to keep its sordid system with minimal structural changes. The result is that while Germany has moved on from World War II and is no longer hated by the neighbors it vicitimized, in Asia the ghosts of WW II are still very fresh and Japan remains despised by the nations it victimized. The Seagraves put it this way:

Liberal Washington policy makers, particularly New Deal Democrats, wanted to alter the post war power structure of Japan permanently to make it more democratic. MacArthur was a reactionary conservative...He and his inner circle of advisors, including Herbert Hoover, concluded that his success in occupied Japan would depend upon manipulating Hirohito...he would induce Hirohito to give them inside knowledge of Japan's financial cliques and other vital power relationships, so that key people could be put under pressure, deals could be made and Japan's postwar power structures could be rearranged to suit MacArthur's conservative political backers rather than American liberals.

...we will unfold new evidence of the massive fraud that ensued, who was involved, and how major witnesses including General Tojo himself were suborned by MacArthur's staff and forced to falsify their testimony and perjure themselves before the international war crimes tribunal. At least one general was hanged for a crime at which he was not even present, forced to take the fall to protect Hirohit's uncle Prince Asaka, the butcher of Nanking, who escaped punishment of any kind...

This led first to the exoneration of the whole imperial family, then to that of the entire financial and industrial elite of Japan (a group that had been the Allies' explicit target for purge and prosecution)...While Germany paid some [30 billion pounds] in compensation and reparations over the years, Japan paid only [2 billion pounds]. Even today, Germany continues this program of compensation and reparations, but Japan dug in its heels and said it was all settled in 1951.

Does this sound like the behavior of a defeated foe? MacArthur, out of some combination of incompetance, conservative ideology, and greed, pretty much let Japan dictate its own postwar fate while Germany was forced, rightly I'd say, to reform significantly, accept full responsibility for its actions, punish all those who participated in atrocities, and pay extensive reparations. Douglas MacArthur and the conservative Republicans allowed Japan to evade reform even to the present time, allowed many war criminals to escape punishment or even responsibility, and paid only token reparations while even keeping most of the war loot it stole from Asia. Beyond this, MacArthur actively abetted the cover up of the wealth of the Imperial family and ruling elite, allowing them to hide money while feigning poverty. This directly affected the decision to let Japan get away with paying almost no reparations. Japan escaped not only with limited reparations, but kept the loot they stole.

That loot amounted to many billions of dollars worth of gold and other precious materials looted from all over Asia and hidden in a project, codenamed "Golden Lily," which was actively supervised by the Imperial family itself. Golden Lily hid treasure in the Philipines as a stopping point on the way to Japan. Some of the loot made it to Japan, some remained in the Phillipines by the time Japan surrendered. Ships and hidden tunnels containing some of this loot have been discovered. One discovery was made by Phillipines Dictator Ferdinand Marcos, whose greed led him to almost kill an American mining engineer, Robert Curtis, to silence him. Curtis only escaped by hiding the maps to other war loot sites, thus making it necessary for Marcos to keep him alive. Remember that Marcos was another ally of American conservatives until the Phillipine people themselves rejected his brutal corruption.

The Seagraves consider the loot that did make it to Japan as the real reason for the amazing recovery of the Japanese economy after WW II. Simply put, their economy and infrastructure may have been in a shambles, but gold and money looted from all over Asia during the war paid for Japan's recovery afterwards. More bluntly put, the victims of Japan's aggression paid for Japan to recover full prosperity. This is in sharp contrast to how Germany was treated:

Although there have been many investigations of Nazi war loot, there has never been a formal investigation of the looting of Asia by the Japanese, nor has Japan ever been forced to account for the plunder. The amounts involved dwarf the Nazi looting many times over.

More recently, in the 1970's, the John Birch Society (part of the right wing extremist end of the Republican Party) lent nearly half a million dollars to an American treasure-hunter to recover and lauder Japanese war loot hidden in the Phillipines. As the Seagraves put it:

The [John Birch] society seemed to believe that it was perfectly correct to break Americans laws regarding the illegal laundering of money...

Greed, on the part of the Japanese army and politicians, of Ferdinand Marcos, and of the John Birch society, has surrounded this war loot. But in the end it must be remembered this was looted from real people, victims of Japanese aggression in nations all over Asia whose economies suffered because of this aggression and looting. America did nothing to try and restore this loot to its rightful owners. I suspect that the poverty and social disruption caused by Japanese aggression and looting are part of the reason that communism spread so widely in Asia. American conservatives unwittingly helped the very communists they claimed to oppose by basically sacrificing the economies of most of Asia for the benefit of Japanese recovery. Could the Korean and Vietnam wars been avoided if Asia as a whole had bene rebuilt with the loot Japan had stolen?

Beyond allowing Japan to keep its war loot, the American conservatives conspired to allow many Japanese war criminals off the hook. Perhaps most disgusting was the conspiracy to let Imperial Prince Asaka off the hook for the Rape of Nanking. Prince Asaka, with the words "We will teach our Chinese brothers a lesson they will never forget," and with the orders, "Kill all captives," was directly responsible for the atrocities in Nanking. Yet in the trials after Japan's military defeat, Prince Asaka was absolved of all responsibility. Instead, General Matsui, who had done all he could to restrain the Japanese forces before Prince Asaka took control, was coerceed into claiming responsibility and was hanged. Prince Asaka, who ordered the atrocities, got off with no consequences. General Matsui, who had tried to prevent the atrocities, was hanged. THIS was the kind of injustice that Douglas MacArthur perpetrated in order to preserve the Imperial family and the ultra-nationalist Japanese politicians. Similarly, atrocities committed by Japan's bioweapons unit, Unit 731, tied to Imperial Princes like Takeda and Higashikuni, were covered up by direct order from MacArthur and no one was ever prosecuted for this biological weapons program. MacArthur even went so far as to force many American POWs, who had witnessed many of Japan's atrocities, to sign documents that forbade them from speaking of these atrocities. General Bonner Fellers, a close ally of Hoover and MacArthur's and on MacArthur's staff, ordered Japanese Admiral Yonai to tamper with Tojo as a witness so as to absolve Hirohito from all responsibility for the war. Herbert Hoover himself lobbied defense attorneys to prevent their clients from implicating Hirohoto. Only seven Japanese war criminals were hanged. Sixteen were sentenced to life imprisonment, though were then paroled in 1955, only 10 years after the end of the war. The vast majority were let off. Imagine if we had let Nazi Germany off so lightly and allowed most of the the Nazi party big wigs to return to power after only brief imprisonment.

These accusations are not unique to the Seagraves, though they bring new information and a detailed historical context to the accusations. Other sources for this can be found here.

It should also be noted that not all Republicans were part of this. Eisenhower detested MacArthur and MacArthur found it necessary even to lie to Genearl Eisenhower in 1946 in order to carry out his aid to Japanese war criminals.

Even today the ultra-nationalists hold power through threats, bribes and intimidation. When I lived there, my Japanese friends told me about how Japanese journalists would always tread carefully when discussing the imperial family, the yakuza or WW II because right wing thugs would take revenge on any coverage they disliked. A particularly brutal example of the ultra-nationalist power by violence was the assassination of the Nagasaki mayor, Motoshima Hitoshi, in 1990 because he had the audacity to say (truthfully!) that Emperor Hirohito bore some responsibility for WW II. This atmosphere is a direct result of the failure of MacArthur and his conservative allies to reform Japan's system the way Germany's system was reformed:

The emphasis was not on reform but on continuity. During seven years of occupation, 1945-1952, the same Japanese ruling elite that had run the country since the Meiji Restoration was expected to purge itself, slap itself on the wrist and democratize itself...Before the ashes of Hiroshima and Nagasaki were cold, men opposed to reform of any kind regained control in Tokyo and resumed their former monopoly if wealth and power.

This can be seen in who became the leaders and financial backers of Japan's notoriously corrupt and reactionary Liberal Democratic Party (the LDP, which, as is frequently commented upon, is not liberal, not democratic and not really a party) in post-occupation Japan. Among the leaders of the LDP was Hatoyama Ichiro, who was Education Minister in 1928, advocated beheading opposition, opposed trial by jury, and was one of the organizers of the official deification of the Emperor that helped the dictatorship take hold. Then there was Kodama Yoshio, one of the most infamous yakuza thugs, who worked during WW II with the Japanese army to transport war loot from all over Asia. And Kishi Nobusuke was a member of the Choshu elite that had led the imperialist era, and he led the corrupt alliance between oligarchs and the military and made huge profits from the Japanese occupation of Manchuria and the looting of Asia. He was also a close friend of Tojo, whose success he helped fund. Fascist Hatoyama teamed up with yakuza godfather Kodama and war looter and Tojo backer Kishi to found the LDP. And the LDP, despite frequent sacandals, still dominates Japanese politics. Another link in this chain is the Tsutsumi family and the Seibu Corporation they run. Also war profiteers during the war, they helped hide the wealth of the Imperial family after the war and went on to be among the richest people in the world. They are also among the biggest financial donors to the LDP. The Tsutsumi family was caught up in a financial scandal in 2005, but it is likely that they will weather this in the same way Japanese politicians and businessmen weather all such scandals. If you have ever watched Japanese television you see it all the time. The tearful confession before the media, the slap on the wrist in the form of small fines and brief, often suspended, prison terms, and either a return to power or a comfortable retirement.

The lack of reform in Japanese history has another side, though: economic instability. The Japanese economy is seen as one of the stronger ones, but its underlying corruption is a drain that has repeatedly caused the collapse of a bubble economy. The following description of a Japanese bubble economy in the 1920's could be describing the Japanese bubble economy of the 1980's...or now (and, by the way, has some resemblance to the Bush economy in America in my opinion):

Two years before the Wall Street Crash in 1929, panic hit Tokyo. The Japanese banking crisis of 1927, just like the Japanese banking crisis of the late 1990's, had everything to do with systematic corruption and sweetheart deals. Vast sums of money were lent by Japan's biggest banks to business concerns run by the same men or their relatives and friends. Other powerful families did the same thing, creating a false impression of prosperity. The banks did not secure these loans, because in sweetheart deals it would be embarrassing to insist on security. The banks then failed to audit their own conduct. With so much easy money and no supervision, businesses expanded recklessly. As years passed without any payment of interest on the loans, the banks suffered a liquidity crisis and began to hemorrhage. To stop the collapse of the banks in 1927, the government forked over 2 billion yen in emergency loans, but only to ease the pain of the privileged people who had caused the problem...(Seventy years later, Japan's banking fundamentals remain largely unchanged).

What strikes me about this corrupt system is that far from resembling healthy economies, Japan's traditionally corrupt system more resembles the economy of a third world nation. It manages to take this third world style system to occasional levels of great success. Yet that success is often unstable because the underlying system remains basically unsound, thus cycles of bubbles and collapse have plagued Japan since it began its rapid industrial and economic development in the early 1900's. I have invested in Japanese stocks in the past because of the apparent strength of their economy. But I have since stopped investing in Japan because I recognize that as long as they maintain this kind of underlying third world style corruption, they will not have a stable economy but rather one wherein prosperity will always be something of a bubble waiting to collapse. Investors should not view Japan's economy as equivalent to a developed economy despite the superficial resemblance. They are subject to the more wild swings of a developing economy rather than the usually more reliable steady growth of a developed economy. Investment in Japan is inherantly risky because of their sordid political system that invariably protects corrupt oligarchs.

I still love Japanese culture, at least at its best. I even feel some respect for institution (at least in theory) of the Japanese emperor. I feel that cultural identity in the era of globalization can bee considerably boosted by institutions like the British monarchy and the Japanese Emperor. I even feel that Nepal, despite their consderable need for reform, may have made a mistake in completely abolishing their monarchy. In doing so it risks losing something of its unique identity. Similarly I don't believe it is in the best interests of Japan to completely abolish their Emperor. He remains a powerful part of their identity. But as I finished Yamato Dynasty I was reminded of a very striking scene when I was traveling in Japan. I was in Hiroshima, reading a brief history of Japan while sitting right below the famous "A-bomb dome." I was reading about the rise of Japanese imperialism with brutal militarists running the government and victimizing conquered nations. While I was reading this beneath the symbol of the nuclear destruction that ended WW II, I noticed a bus with political slogans on it circling the area blaring a political speech. It was a right wing political party and their slogans and stands aren't really different from those militarists that brought Japan into WW II, victimized Asia, and bombed Pearl Harbor. I knew even then that in some ways nothing had changed in Japan despite defeat and nuclear attack. Reading Yamato Dynasty I understand why. Japan has a concept of "winning by losing." It seems in many ways they won WW II despite our military victory. I will end with one more quote from the book regarding what Japan got away with:

A Japanese scholar put it in the form of a zen parable, or koan: "If a robbe steals $100 billion and successfully hides the money before he is captured and jailed, and then is released after seven years for 'good behavior,' did he fail or did he succeed?